Nova Southeastern University H.

Wayne Huizenga School of Business & Entrepreneurship

Assignment for Course: Submitted to: Submitted by:

ACTP 5009 - Advanced Accounting Roger Mayer (Student's name) (Student's number) (Address)

(Work phone number) (Home phone number)

Date of Submission: Title of Assignment:

CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledged and disclosed in the paper. I have also cited any sources from which I used data, ide or words, either quoted directly or paraphrased. I also certify that this paper wa prepared by me specifically for this course.

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hor of this paper and nowledged and hich I used data, ideas y that this paper was

Problem 1-3 Persis issues 25,000 shares of stock for Sinecos outstanding shares 1a

To record costs of combination in a business combination with Sineco.

To record allocation of investment cost to identifiable assets and liabilities according to th $750,000 cost - $570,000 fair value of net assets acquired.

1b

Persis issues shares of stock for Sinecos outstanding shares 2a

To record issuance of common shares.

To record costs of combination in the acquisition of Sineco.

To record Sinecos net assets at fair values.

To record gain on bargain purchase and adjust Investment in Sineco to reflect total fair value.

2b

sues 25,000 shares of stock for Sinecos outstanding shares Investment in Sineco Capital stock, $10 par Other paid-in capital

Investment expenses Other paid-in capital Cash costs of combination in a business combination with Sineco.

Cash Inventories Other current assets Land Plant and equipment net Goodwill Liabilities Investment in Sineco

allocation of investment cost to identifiable assets and liabilities according to their fair values an cost - $570,000 fair value of net assets acquired.

Persis Corporation Balance Sheet 2-Jan-09 (after business combination) Assets Cash Inventory Other Current Assets Land PP&E Goodwill Total assets Liabilities and Stockholders Equity Liabilities Capital stock, $10 par

Other paid-in capital Retained earnings Total liabilities and stockholders equity

sues shares of stock for Sinecos outstanding shares Investment in Sineco Capital stock, $10 par Other paid-in capital issuance of common shares. Investment expense Other paid-in capital Cash costs of combination in the acquisition of Sineco.

Cash Inventories Other current assets Land Plant and equipment net Liabilities Investment in Sineco Sinecos net assets at fair values. Investment in Sineco Gain on bargain purchase gain on bargain purchase and adjust Investment in reflect total fair value. Fair value of net assets acquired Investment cost (Fair value of consideration) Gain on Bargain Purchase

Persis Corporation Balance Sheet 2-Jan-09 (after business combination)

Assets Cash Inventories Other current assets Land Plant and equipment net Total assets Liabilities and stockholders equity Liabilities Capital stock Other paid-in capital Retained earnings

rding to their fair values and the remainder to goodwill. Goodwill is computed:

Problem 1-5 1 Journal entries to record the acquisition of Dawn Corporation Investment in Dawn Capital stock, $10 par Other paid-in capital Cash T o r Investment expense e Other paid-in capital c Cash o r T d o

a r c e q c Cash u o i Accounts receivable r s d Notes receivable i Inventories t p Other current assets i a Land o y n m Buildings e Equipment o n Accounts payable f t Mortgage payable, 10% Investment in Dawn D o a f T w o n c Investment in Dawn o r fGain on bargain purchase s e o t c To adjust Investment account to total fair value and recognize the gain from the bargain r s o r 1 t d 0 o 0 t , r h Gain on Bargain Purchase Calculation 0 e Acquisition price 0 g Fair value of net assets acquired 0 i n Gain on bargain purchase s e s t h e a r 2 Celistia Corporation r s Balance Sheet e a s at January 2, 2009 s n e d t o s f i s o c s f

(after business combination)

Assets Current Assets Cash Accounts receivable net Notes receivable net Inventories Other current assets Plant Assets Land Buildings net Equipment net Total assets Liabilities and Stockholders Equity

Liabilities Accounts payable Mortgage payable, 10% Stockholders Equity Capital stock, $10 par Other paid-in capital Retained earnings Total liabilities and stockholders equity

he gain from the bargain purchase.

Exercise 2-4 Income from Medley for 2009 Share of Medleys income

Exercise 2-8 Preliminary computations Cost of interest January 1, 2008 Book value acquired Excess fair value over book value Excess allocated to Inventories Equipment Goodwill Excess fair value over book value Raythons underlying equity in Treaton Add: Goodwill Investment balance December 31, 2012 Alternative computation Raythons share of the change in Treatons stockholders equity Less: Excess allocated to inventories Less: Excess allocated to equipment Increase in investment account Original investment Investment balance December 31, 2012

Problem 3-3 Cost of investment in Softback Books January 1, 2009 Implied fair value of Softback Book value of Softback Excess of fair value over book value Schedule to Allocate Fair Value Book Value Differential

Current assets Equipment Other plant assets Bargain purchase * Excess fair value over book value

Fair Value - Book Value

Allocation

Problem 3-6

Perry Corporation and Subsidiar Consolidated Balance Sheet Working at December 31, 2009
Perry per books Cash Receivables net Inventories Land Equipment net Investment in Sim Goodwill Total assets Accounts payable Dividends payable Capital stock Retained earnings Noncontrolling interest Total equities $1,651,000 $500,000 $1,651,000 $410,000 60,000 1,000,000 181,000 $500,000 $80,000 10,000 300,000 110,000 $42,000 50,000 350,000 150,000 600,000 459,000 Sim per books $20,000 130,000 50,000 200,000 100,000

ation and Subsidiary ance Sheet Working Papers ember 31, 2009
Adjustments and Eliminations Consolidated Balance Sheet